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Sonatrach is the largest Algerian and African company and the 11th largest oil consortium in the world. Its gross sales (as of 2002) was 1,530 billion Algerian dinars for a net income of 175 billion. The company, which employs approximately 120,000 workers, produces 30% of the GNP of Algeria. Annually it produces (as of 2002) 206 million Tonne of oil equivalent (toe), including 11.7% (24 million toe) for the domestic market. Sonatrach operates the largest oil field in Algeria, Hassi Messaoud, which produced around 440,000 bbl/d (70,000 m3/d) of crude in 2006. Sonatrach also operates the Hassi R'Mel field (north of Hassi Messaoud, south of Algiers), which produces around 180,000 bbl/d (29,000 m3/d) of crude. Other major fields operated by Sonatrach include Tin Fouye Tabankort Ordo, Zarzaitine, Haoud Berkaoui/Ben Kahla, and Ait Kheir.

Sonatrach operates over 2,400 miles (3,900 km) of crude oil pipelines in the country. The most important pipelines carry crude oil from the Hassi Messaoud field to export terminals. Sonatrach also operates oil condensate and LPG pipeline networks that link Hassi R'mel and other fields to Arzew. Sonatrach is expanding the Hassi Messaoud-Azrew pipeline, the longest in the country. The project entails a second, parallel line that will more than double the capacity of the existing line.

Sonatrach was founded on December 31, 1963. At the time, however, the Algerian state held only 4.5% of the exploration perimeters, while French interests were as high as 67.5%.[3] After the Arab-Israeli War in June 1967, Algeria decided to nationalize the refining and distribution activities of Mobil and Esso, and Sonatrach signed an agreement with Getty Oil on October 19, 1968 receiving 51% of Getty Oil's interests. It gained control over all Algerian petrochemical resources following President Houari Boumedienne's nationalisation of all French oil and gas holdings beginning on February 24, 1971. The old concession system was replaced by a seizure of a 51% share of French petroleum companies. Only Total agreed to continue its activities; the other companies left Algeria. Beginning on December 10, 1979, a conference on the exploitation of petroleum recommended increasing participation in the research efforts by foreign companies and countries. By a decree published in the Journal Officiel on May 17, 1980, Sonatrach was divided into four enterprises. From 1986, it became possible for foreign hydrocarbon companies to do business in Algeria within a partnership with Sonatrach (this process was simplified in 1991). The Sonatrach-Gaz de France accord, signed on January 12, 1989, allowed the state to set a compromise price of about $2.30 per million BTUs. A total of 9.5 billion cubic meters of natural gas were delivered annually until 1990, and Sonatrach recovered 850 million francs in arrears, since the accord applied retroactively beginning on November 1, 1987. In March 2005, the Algerian parliament adopted the hydrocarbon reform bill, encouraging international oil company (IOC) investment in the hydrocarbon sector, which Sonatrach previously dominated. However, 2006 amendments to the hydrocarbon bill created a windfall tax on IOC profits when oil prices top $30 per barrel. This tax reached up to 50% on some contracts. In addition, the amendments gave Sonatrach rights to a 51% or higher participation option on each newly discovered project.[4]

Sonatrach owns 50% of Numhyd, a joint venture with Tunisia's ETAP, and ALEPCO, a joint venture with Libya's National Oil Corporation. In 1998, Sonatrach acquired Naftal, which is the principal company selling petroleum-based fuels for domestic consumption with about 10,000 gas stations (as of 2005.) Naftec, a subsidiary of Sonatrach, operates Algeria's four refineries, which have combined capacity of 450,000 bbl/d (72,000 m3/d). The Skikda refinery (300,000 bpd) provides the bulk of Algeria's refined products production. The 30,000 bbl/d (4,800 m3/d) Hassi Messaoud refinery supplies products to southern Algeria, while the 60,000 bbl/d (9,500 m3/d) Algiers refinery processes crude from Hassi Messaoud for consumption in the capital. Finally, the coastal 60,000 bbl/d (9,500 m3/d) Arzew refinery produces products for domestic consumption and export. In July 2006, Sonatrach and the China National Petroleum Corporation (CNPC) brought online the small-13,000 bpd Adrar refinery, which is located near the village of Sbaa 40 km (25 mi) north of Adrar.[4]

Hydrocarbons play a crucial role in Algeria's economy, accounting for roughly 60% of budget revenues and over 95% of export earnings. The country ranks fourteenth in petroleum reserves, containing 11.8 billion barrels (1.88×109 m3) of proven oil reserves with estimates suggesting that the actual amount is even more. The U.S. Energy Information Administration reported that in 2005, Algeria had 160 trillion cubic feet (Tcf) of proven natural gas reserves, the eighth largest in the world.[5] As a result, Sonatrach is very important politically. Most Energy Ministers of Algeria have come from a Sonatrach background.

A joint venture between Air Algérie (49%) and Sonatrach (51%) in 1998 established the passenger airline company Tassili Airlines. Commercial services were launched on 8 April 1999 with a flight from Hassi Messaoud to Algiers. In 2005, Air Algérie withdrew its funds in the airline, which thus became wholly owned by Sonatrach. In 2006, Sonatrach gave Tassili Airlines permission to expand its domestic destinations and for the future opening of international routes.